Trump is about to finalize the next chairman of the Federal Reserve—this appointment is by no means an ordinary political arrangement, but rather a core variable affecting global liquidity. The chairman of the Federal Reserve controls the direction of monetary policy, and their stance will directly influence the tightness of the dollar, risk appetite, and profoundly affect the flow of funds and valuation logic of crypto assets. This personnel change is likely to become a key macro node that can reverse the market situation in the crypto space.
The impact paths on the crypto market differ drastically depending on which candidates with different policy inclinations come to power:
If Kevin Hassett and other "dove" figures are appointed: their policies typically lean towards looser monetary conditions and low interest rates, promoting global liquidity expansion. Against the backdrop of declining real interest rates in the U.S. dollar and capital seeking high returns, mainstream assets like Bitcoin (BTC) and Ethereum (ETH) are expected to gain strong support and even attract traditional institutions to accelerate their allocation, forming long-term structural benefits.
If choosing unorthodox figures like Judy Shelton: She has questioned the independence of the Federal Reserve and advocated a return to the gold standard. Although her policies may be difficult to implement comprehensively, her stance may weaken the market's trust in the fiat currency system, indirectly strengthening Bitcoin's narrative as 'digital gold,' providing alternative support for the crypto market.
If ultimately replaced by hawkish officials like Waller or Bowman: This may continue high interest rates and accelerate balance sheet reduction, leading to a tightening of global liquidity. As a high-risk asset, the crypto market will be the first to face pressure from capital outflows, and the market is likely to be under pressure and pull back.
What needs to be vigilant is that the current market has formed a strong expectation of 'dove coming to power,' and related benefits may have been fully priced in. Once the formal appointment is announced, it is possible that there will be a profit-taking trend of 'buy the expectation, sell the fact,' leading to a short-term pullback. More importantly, what truly determines the market direction is not just the candidates themselves, but the specific policy signals released during their congressional hearings and the future monetary policy path.
Operational advice:
Holders: Should maintain core positions and avoid being shaken out by short-term volatility. At this stage, it is more important to focus on macro signals rather than emotional noise, maintaining strategic composure.
Traders: Closely track nomination progress and hearing statements, be wary of violent fluctuations caused by expectation gaps, set profit-taking and stop-loss levels in advance, and utilize options and other tools to hedge tail risks when necessary.
It should be noted that in the highly liquidity-dependent crypto market, every move of the Federal Reserve serves as a weather vane. At this moment, rather than betting on a single event, it is better to build a hedging mindset and preserve certainty amidst uncertainty.
Extended thoughts: Why is the Federal Reserve so important?
Although the crypto market claims to be 'decentralized,' its pricing is still deeply embedded in the global macro financial system. Over the past two years, the correlation between BTC and Nasdaq has exceeded 0.8, while the latter is directly driven by Federal Reserve policies. In short: easing → risk assets rise; tightening → risk assets fall. This logic has been repeatedly validated in 2021 and 2022.
Therefore, whether you believe in 'digital gold' or the 'Web3 revolution,' you cannot ignore the liquidity valves of the real world. This time, Trump's choice is not just a matter for the U.S., but a life-and-death challenge that every holder must face.
Final reminder:
The market always rewards those who are well-prepared and punishes blind followers. Do not treat 'hope' as a strategy, nor equate 'news' with 'opportunity.' True advantages come from an understanding of the macro context, adherence to position discipline, and the ability to remain clear-headed amidst the noise.
Be brave, but not reckless; optimistic, but not delusional.
Your position deserves more rational protection.
